2006 May Status Report of the Auditor General of Canada

December 1998

The Treasury Board Secretariat should complete its consultations with its stakeholders as quickly as possible in order to determine the best possible options to move the appropriations (supply) process to a full accrual basis.

Progress is slower than anticipated. Response to a consultation paper is expected by 10 March 2000, from which recommendations to the government will be made in the following two or three months.

March 2000

The Treasury Board Secretariat should complete its consultations with departments and agencies on moving to accrual appropriations.

Once the consultations are completed, the Treasury Board Secretariat should inform Parliament and the Public Accounts Committee in writing of its final decision and recommendations to the government on moving to accrual appropriations.

Responses to the consultation paper have been received and are being compiled and analyzed.

Completion of the analysis is expected by September 2000, although further review of accrual-based budgeting and its relationship with appropriations may be required.

March 2001

The Treasury Board Secretariat should complete its consultations with parliamentarians aimed at determining the best possible options to convert the appropriations (supply) process to a full accrual basis and report the results to the House of Commons by 31 March 2002; the Government of Canada should move to an accrual-based system of appropriations (supply) by 1 April 2003.

The subject of accrual-based appropriations is very complex and requires careful review and consultation. Any decision made will have tremendous impact and consequences for government. This strongly underlies the need for very careful, rigorous, and exhaustive study before making any decisions in the area.

May 2001

The Treasury Board Secretariat should undertake and complete the required studies and consultations on full accrual-based appropriations, and it should prepare a set of proposals and alternatives to be presented to the House of Commons Standing Committee on Public Accounts, no later than 31 March 2002.

The subject of accrual-based appropriations is very complex and requires careful review and consultation. The decisions made respecting any contemplated changes to our budgeting and appropriations practices will have tremendous impact and consequences for government. This strongly underlies the need for very careful, rigorous, and exhaustive study before making any decisions in the area.

December 2002

The government should adopt the integration of full accrual-based budgeting and appropriations into the Canadian Expenditure Management System and advise the Public Accounts Committee when the decision has been made.

Once the decision is made to move toward full accrual-based budgeting and appropriations, the Treasury Board Secretariat should immediately prepare an action plan together with an implementation timeframe and table both these documents with the Public Accounts Committee.

Adopting the integration of full accrual-based budgeting and appropriations into the Expenditure Management System could have far-reaching implications for government and for Parliament. Unlike accrual accounting, there is no international consensus on the adoption of accrual budgeting. Those countries that have implemented accrual budgeting have adopted specific accrual tools to suit their specific need and to help them implement much broader reforms. Moreover, some countries have indicated that their accrual budgeting frameworks are not yet proven and may be subject to change in the context of lessons learned. We intend to learn from their experience.

February 2005

The government should extend full accrual accounting to budgeting and appropriations and set a firm timeline for its completion. The Public Accounts Committee further recommends that the government report back to Parliament annually on the progress being made in this respect.

Since the impacts of adopting accrual-based budgeting and appropriations are major and far-reaching, the Treasury Board Secretariat continues to believe that a prudent and thorough approach to introducing changes in budgeting or appropriations is the most appropriate approach. Although the rate of change is slower than the Standing Committee on Public Accounts or Auditor General would like, progress is being made in the area of accrual-based budgeting.

As announced in Budget 2005, the government will be implementing a more rigorous approach to capital planning, beginning with a few pilot departments this fall. Parliament will be asked to consider multi-year appropriations of capital funds for these pilot departments.

The Treasury Board Secretariat is also examining the feasibility of conducting the annual reference level update exercise on an accrual basis, as well as the cash basis on which it is presently based.

The Treasury Board Secretariat will report back to Parliament annually, through its departmental performance report.